Crowding Out Results in A(n)

question 319

Multiple Choice

Crowding out results in a(n) :

• A)decrease in private investment spending resulting from government deficit spending.
• B)increase in accumulation of physical capital, which leads to higher economic growth.
• C)increase in private investment spending resulting from government deficit spending.
• D)increase in consumption spending as a result of higher investment spending.

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Definitions:

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a specific event.

Liabilities

Financial obligations or debts that an entity owes to others, which must be settled in the future through the transfer of assets or services.

Provisions

Liabilities of uncertain timing or amount, set aside in anticipation of future obligations or costs.

Present Obligation

A duty or responsibility that exists at the reporting date, typically requiring an outflow of resources.